enlarged Europe = 500 million consumers EU applicant countries (2002) Bulgaria Cyprus the Czech Rep. Estonia Hungary Latvia Lithuania Malta Poland Romania, the Slovak Rep. Slovenia Turkey.
overlapping European business cultures Anglo- American Scandinavian new Russian capitalism Rhinela nd Latin
New strategies of internalization relative size is necessary to compete on the big enlarged EU domestic market of 500 million consumers; EU market is open to world competition; to compete globally ---French companies have to focus on core businesses, acquire companies in all key markets and build international alliances; companies like Airbus, Carrefour, Danone, Michelin, Ondeo, Renault etc fight for world leadership on their segment.
Airbus
from activity sharing... 3 1 2 3 4 4 5 : final assembly Airbus A300 1974 Airbus A 320 1984 Airbus A330 1993 Airbus A 319 1995 ATR Bae 146 Aerospatiale British Aerospace DASA 1+5 1+5 1+5 1+(2) 2+3+(5) 3 3 3 3 2 2 2 (2)+5 1+2+3 +4+5 CASA 4 4 4 4 Alenia 1+4 90% of business 10% of business Source: Dussauge 1999
to Airbus integrated company Airbus Integrated Company shareholders (2000): EADS: merger of Aerospatiale-Matra (France), DaimlerChrysler Aerospace (Germany) and CASA (Spain). BAE SYSTEMS (UK) 40,000 employees in Europe, 100,000 employees around the world. design, engineering and manufacturing in France, Germany, Spain and UK. Two final assembly lines: Toulouse, France & Hamburg, Germany
a world oligopoly: tire industry Toyo 2% local players 21% Michelin 19% Cooper 2% Yokohama 4% Bridgestone 19% [1999] Pirelli 4% Sumitomo 5% Continental 7% Goodyear 17%
Michelin: managing a brand portfolio MICHELIN KLEBER BF GOODRICH TAURUS PNEU LAURENT WOLBER UNIROYAL RIKEN STOMIL-OLSZTYN TYREMASTER SIAMTYRE WARRIOR
Carrefour international presence GNP Per cap. Highincome & Middle Income Lower- Middle Income & Low Income EUROPE AMERICAS ASIA region first open. stores region first open. stores region first open. France 1963 3837 Korea 1996 Spain 1973 2656 Singapore 1997 Greece 1991 332 Japan 2000 Portugal 1991 306 Italy 1993 985 Belgium 1998 534 Turkey 1993 46 Brazil 1975 189 Taiwan 1989 Poland 1997 51 Argentina 1982 361 Malaysia 1994 Czech R 2000 6 Mexico 1994 18 China 1995 Slovakia 2000 2 Colombia 1998 3 Thailand 1996 Chile 1998 3 Indonesia 1998 stores 20 1 1 24 6 27 11 7 Source: Carrefour 2000
Group Carrefour
We are The 1 st European retailing group The 2 nd worldwide retailing group
We are The 1 st retailer in: France Spain Greece Belgium Argentina Taiwan Indonesia
We have Over 2 billion cash transactions a year Over 9000 stores spread over 31 countries, including 731 hypermarkets Over 380 000 employees
In 2000, we opened 1 Dia - hard-discount store per day 1 Champion supermarket every 3 days 1 Carrefour hypermarket per week
Today, we satisfy our customers needs With our different Stores Hypermarkets, Supermarkets, Maxi discount stores, Convenience stores, Cash and Carry With our Brands Carrefour, Reflets de France, Filière Qualité Carrefour, ScelgoBio, Viversano, Harmony, TeX, TopBike, De Nuestra Tierra, GreenCut... With categoric stores Insurance, Financial Services, Flowers, Holidays, Optical,, Car maintenance, Frozen Food Stores With E-commerce Ooshop, VeryWine, Gardening, Furnitures...
Our ambition Meet the challenge of modern consumption
9225* stores spread across 31 countries Europe: 8478 Latin America: 639 731 Hypermarkets 2290 Supermarkets 3745 Maxidiscount stores 2261 Convenience stores 198 Cash & carry stores Asia: 108 * at February 2002, including partners
731 hypermarkets updated 2002, February 5th Europe: 499 Mexico : 19 Colombia : 5 Poland : 9 Belgium : 57 Romania : 1 France : 214 Czech Republic : Portugal : 5 11 Greece : 11 Switzerland : 11 Spain : 113 Italy : 37 Turkey : 10 Other countries, with partners : 20 Chine : 27 Thaïland : 15 Japan : 3 South Korea : 22 Taiwan : 26 Indonesia : 8 Brazil : 74 Chile : 4 Argentina : 22 Latin America: 124 Singapore : 1 Malaysia : 6 Asia: 108
2000 consolidated turnover - including taxes - 70 000 60 000 64 802 Euros millions 50 000 40 000 30 000 33 997 30 805 20 000 10 000 0 52,5% France 47,5% 25,0% Abroad Group % : proforma change
Commercial sales by type of business Under store banners Supermarkets 20% Maxidiscounters 7% 13% Cash & Carry, Convenience stores, Frozen Food stores Wholesale activities 60% Hypermarkets
Consolidated turnover per region Europe 79% including France 53% Asia 6% Latin America 15%
A strong growth strategy 19 countries 31 countries 5 countries France Spain Brazil Argentina Taiwan 9 countries + Turkey Italy Portugal Mexico + Monaco + China South Korea Czech Republic Thailand Poland Singapore Colombia Chile Indonesia Malaysia + Greece Belgium United Arab Emirates* Mauritius* Madagascar* Slovakia Japan Tunisia Dominican Republic Qatar Rumania Switzerland 1989 1994 1998 2000 * partners
Employment in Asia Indonesia 9% Malaysia 7% Japan 4% Singapore 1% Taiwan 18% Korea 13% Thailand 15% China 33% 38 745 employees (updated December 31th, 2001 = 10% of integrated companies staff
Carrefour China
CHINA - Year 2000 Area: 9.6 million km 2 Territorial division: 31 Provinces, Autonomous regions,etc. Capital: Beijing Population: 1.25 billion (2000) GDP: 8,940.4 billion yuan (1,000 billion USD) Annual per capita income: 6280 yuan (758.5 USD) Sales of consumer goods: 3415.3billion (412.5 USD) CARREFOUR CHINA China entry date: 1995 Trading name: Carrefour (China)Management Consulting Service Co., Ltd. Employee: 15,000 Turnover in 2000: Over 8 billion yuan
Carrefour in China black number : existing store: 27 red number : signed project :9 Harbin (1) Beijing (4) Shenyang (1) Tianjin (2+1) Dalian (1) Qingdao (1+1) west region east region Nanjing (1)Wuxi (1) Chengdu (1+1) Shanghai (6) Wuhan (2+1) Hangzhou (1) Chongqing Ningbo (1) (2) Changsha (1) Guangzhou (1) Dongguan (1) Shenzhen (2+1) Zhuhai (1)
Carrefour in China: Opening Dates 1995.12.25 Beijing Chuangyijia Store 1996.01.16 Shanghai Qu Yang Store 1996.11.26 Shenzhen Nan Tou Store 1997.10.06 Tianjin Nan Kai Store 1997.12.03 Shanghai Wu Ning Store 1998.01.08 Chongqing Mian Hua Jie Store 1998.01.13 Tianjin Long Cheng Store 1998.04.08 Chongqing Jin Guan Yin Store 1998.10.19 Zhuhai Le Tian Store 1998.11.18 Wuhan Shi Sheng Store 1998.12.09 Hanghai Jin Qiao Store 1998.12.12 Shanghai Gu Bei Store 1998.12.14 Dongguan Store 1999.01.06 Shenyang Bei Zhan Store 1999.07.15 Beijing Fangzhuang Store 1999.09.09 Wuhan Wu Sheng Store 1999.09.26 Shanghai Nan Fang Store 1999.09.30 Chengdu Ba Bao Jie Store 1999.10.27 Nanjing Da Qiao Store 1999.11.23 Ningbo Jiang Dong Store 1999.12.08 Beijing Ma Lian Dao Store 1999.12.09 Qingdao Ming Da Store 2000.01.28 Dalian Store 2000.08.04 Meilin Store 2000.08.08 Fangyuan Store 2000.08.09 Gongjiang Store
A store is on average... *10,000~15,000 Daily Debits *500~600 employees *10,000 square meters. *18,000 products available *60% of sales in food *40% of sales in non-food
Suez Group Water Business
ONDEO OBJECTIVES WATER: Turnover + 60% over 5 years (1999-2004) bn 1981 1992 20 million customers 1996 48 million customers 1999 100 million customers Objective 2004 60,000 industrial customers
ONDEO Value Chain Design Construction Operation Finance Management Customer Assess our customers problems Build solutions Implement solutions Asset management Customer care
Withdrawal from non-strategic businesses (1997-2000) eliminating all confectionery business; eliminating more than half the Group's grocery brands in Europe: pasta, condiments, sauces; eliminating beer business in Europe.
Focusing on core business Dairy Products: DANONE Biscuits: LU Beverages: EVIAN
20 years of acquisitions in Asia 1980 - Japan: JV with Ajinomoto (fresh dairy products) 1987 - Canton: JV for fresh dairy products 1989 - India: participation in Britannia. 1989 - Australia: control of Griffin's 1991 - Honk-Kong: acquisition of Amoy 1994 - Shanghaï: JV in yogurts Shangai Danone Dairy (yogurts) 1994 - Shanghaï: JV in Shanghai Danone Biscuits (biscuits) 1995 - China: participation in the Haomen breweries 1996 - China: control of the Hangzhou Wahaha 1996 - China: acquisition of Wuhan Dongxihu Beer 1998 - Singapore: participation in Yeo Hiap Seng (beverage market leader) 1998 - Indonesia: agreement with Aqua (bottled mineral water) 1998 - China: agreement with Health (bottled mineral water) 1998 - Singapore: participation in Yeo Hiap Seng (beverages) 2000 - China: acquisition of Robust (water and dairy beverages) 2000 - China: participation in Aquarius Water 2000 - Malaysia: buy back of United Biscuits activities
12% of sales in Asia-Pacific in 2001 China represents over 70% of sales in the region 4 companies together account for nearly 80% of sales in the region: China : Wahaha and Amoy India : Britannia New Zealand : Griffin's
Renault - Nissan alliance (1999-2001) common platforms (small and lower medium segments): objective 50% of production volume (3.5 million vehicles) by 2005. joint development on a common small diesel engine. joint purchasing organization: objective 70% of purchases joint distribution in Europe industrial and sales synergies abroad joint IT Systems
Two entities - one strategy (2002) separate identities and independence of the two groups, responsible for their own operating activities. reinforcing the cross-shareholdings: Renault s stake in Nissan up from 36.8% to 44.4% Nissan share in Renault 15% without voting rights. setting up Renault-Nissan BV, 50-50 JV in charge of coordinating the alliance s operations worldwide. The French State has announced it would lower its shareholding in Renault to 25%.
Changes in French business system (1990-2002) privatization: drastic reduction of state involvement in industry, banking, automotive sector (Renault), oil industry (Totalfinal Elf), telecommunications; growing interest of French public to the Paris "Bourse ; loss of influence of "noyaux durs : the intricate networks of cross ownership between associated banks and corporations loss of influence of government and high civil servants ( grand corps ) thanks to globalisation, Europe and greater autonomy at regional level: the French "regions".
France fully state controlled companies (2002) Sector Aerospace & Defence: e.g. Snecma (aircraft engines) Mortorways Chemicals Energy: EDF (largest European electricity company), GDF (Gaz), Coal etc Leasure: Française des Jeux Media: France Television Financial Services: La Poste Transportation: SNCF (French Railways), Paris Metro
Companies to be privatized (2002) Company State s share (%) Air France 55.9 France Telecom 55.5 Thales (defense electronics) 51.0 ASF (motorway operator) 51.0 Renault (car industry) 25.0 Thomson Multimedia 21.0 EADS (aircraft industry) 16.7 Bull (computers) 16.3 Dassault Systems 15.8 Credit Lyonnais (bank) 11.6
percentage of capital owned by foreigners in 1997 Growing influence of foreign investors Suez-Lyonnaise Paribas ELF AXA UAP Alcatel 39% 45% 38% 42% 51% 35% 37% 42% 40% 0% 10% 20% 30% 40% 50% 60%
Conclusion French companies go global with: more focused strategies in depth corporate transformation
Focusing on core businesses backward integration conglomerate diversification focusing of core business forward integration international strategy
Transforming the corporation 6 transforming the institution 5 restructuring international operations 1 value creation throughout the network redefinition of core business 4 managing intangibles 2 building capabilities 3 managing alliances and JVs